For a while now, scores of commentators have been trying to call the peak of the Aussie property market. Yet so far they’ve all been proven wrong as cheap cash fuels property growth.
Property Market
When you hear about a rising property market, remember it’s not the house rising in value. The house can only depreciate.
It’s the land the house sits on that goes up in value. It’s important to look at the property market from a land perspective. The land around the services and infrastructure most people want to live close to is fixed in supply.
What influences the property market?
The property market is not subject to the same laws of competition. It will sell for the highest prices that the economy can afford to pay for that location value. In other words land will always soak up any of society’s gains.
That’s why here at Markets & Money our property experts keep their fingers on the pulse of Aussie land prices.
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It seems spring has brought an unexpected cool change to Sydney’s property market. House prices in the NSW capital fell 0.1%. The first downward trend since late 2015.
Here’s what really sticks the boot in. Global debt is now US$70 trillion (AU$89 trillion) higher than it was 10 years ago. But hey, markets have short-term memories.
A daily commute from Sydney to Melbourne will be feasible. It’s just a small part of a technological revolution slowly creeping into modern life. And it could be game-changing. This new technology could have a very strange effect on future Australian property prices.
The amount of money sovereign wealth fund command is massive. According to BlackRock Inc. [NYSE:BLK], many of these funds are looking to increase their exposure to real estate...
Property is no longer a driver of economic growth. Which is why the Aussie government is throwing public money into infrastructure. How long they can keep this up is anyone’s guess.
As of June this year, the Australian Bureau of Statistics announced the mean dwelling price in Australia at $669,700. Bringing the total value of housing to a whopping $6.6 trillion.
The major banks have around 60% of their balance sheets exposed to residential real estate. It won’t take much to shake the foundations supporting these pillars of society.
Empty homes, restricted investments and a cooling market. Is this finally a sign that the bubble is set to burst?
Construction is big business in Australia. Because of its sheer size and importance, any weak spots are going to show up in construction first. As they did when the mining boom was critical to economic growth.
REITs enable investors to own a slice of some of the biggest commercial properties. An investor gains exposure to the property market without all the hassles that come with being a property owner.
It doesn’t matter if your vice is houses or booze. Failing to meet your expectations invites unnecessary hardship into your life.
China announced plans for massive global infrastructure projects - The ‘One Belt, One Road' project will revive ancient networks of the silk trade routes.
Who’d have thought McDonald's success came not from the sale of burgers, but from the value in the land on which the burgers were made?
We worked that out years ago. But they’re now focused on creating their own wealth, rather than waiting for the next recession, if indeed if actually happens. It certainly won’t happen this year.
